AMGN - Earnings call transcript Q2 2019

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Operator

My name is Ian, and I will be your conference facilitator today for Amgen's Second Quarter 2019 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at the conclusion of the last speaker’s prepared remarks. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question during the Q&A session. [Operator Instructions]

to Sood, like Investor President now Relations. would introduce Vice Arvind of I Mr.

now you begin. Sood, may

Arvind Sood

Ian. afternoon Thanks, discuss Okay. Good our us for second to joining quarter results. everybody, and thanks

like in Citi. past, to done Welcome who in And Mohit. our new coverage are a Mohit this I've As quarter, those I would it's special to the welcome of company. their extend Bansal of

long-term best growth. performance in focused the characterized be as our can staying continued think I on quarter sustained while execution second

Leading will provide CEO, strategic a particularly today the Bradway, perspective Bob backdrop environment. the business and discussion Chairman our be our who of a will business within fast-changing on

David quarter for will Meline our review the CFO, and financial guidance. second updated results Our provide then

our Dave by Head Our Head of who Global Reese, Commercial pipeline review performance; of our product Operations, update. R&D, provide will Murdo a will followed Gordon

in will discussion a As past, today we you slides our link should and the have have received to guide done we separately. use

financial presentation that forward-looking we'll Just statements of statements. in be and measures use a will the some reminder non-GAAP today's

XX-K factors cause to actual results that materially. subsequent identify Our our differ could filings and

So, to I would call the to Bob? that, turn Bob. with over like

Bob Bradway

innovative for Okay. medicines our growth we're thank and you, of us. first-in-class diseases the core delivering all at year of and Thank through are Halfway addressing strategy strategy the making you course in Arvind progress long-term clear joining on for this globally. of serious

need market, our strategy is BLINCYTO, unmet millions is size like embraces bispecific engager diseases specialty our While large patients. medicines many addresses in where also with our which effect of for T-cell strategy in measured a explicitly the example its

to global can pressures than annual think the of will price that and that price through we expect essential this rather be Over products gains increases. balance growth highlight importance is sustained volume deliver going time, increasing

great of Prolia is a this. example

millions of as it than Prolia. therapy still are women like growth yet who preventative its and risk of posted remain once prospects bright after double-digit more high again there Now fracture, long-term volume years launch not XX a are quarter this on at

of leadership generally, and recent for products address more like seeking enable points epidemic will in More osteoporosis. to the us health, positions options bone to way Repatha, our to and industry The other of bring Prolia launch the our potentially EVENITY extend Aimovig portfolio global in tezepelumab.

on touch me Let briefly Repatha.

but I think of numbed The leading been health that numbers heart have morbidity a them, death decades and some worsened stroke disease the so trends that of all a rate into large us know U.S. because actually is increasing complacency the that's problem and lulled decreasing changing is partly globally. in are seem sense mortality, of internationally. to and the from after about cardiovascular attack have or and now

see increasing out-of-pocket in year We of therapy. abroad, seeking a use we're of we to medicines recognition and actions to disease. part taking our course that lower did competitive widespread for this do address here high more without levels this only too in people. one given that and for many of a Repatha this We that uptick demographics, is reasons know LDL cannot deaths. are get systems believe We too events cardiovascular meaningful to in ignore for offers And many continue worse context innovative last including atherosclerotic use patients the health the to as of and It to people. will solution costs the problem

of and of the society. for who those in We in heart of urgency getting growing the recognize to will disease high-risk patients continue advocate our front problem

the We Society improves Aimovig's new we're of afflicting transforming the American medicine Prolia time. efficacy data that important recently of meeting Repatha, addresses Headache With treatment first-in-class migraine. Aimovig, it at Like millions and disease a worldwide. over chronic CGRP our debilitating people demonstrating presented

driver importance come. for to medicine this be expect key increasing growth of years sufferers to a We to migraine and

than to growing together these are and revenues. see IMLYGIC Vectibix, at we growth KYPROLIS, and more Nplate posted XX% billion our annualizing from BLINCYTO growth XGEVA, which medicines. ahead oncology Turning $X hematology products, for We more

by in this was and survival MRD-positive our BLINCYTO data compelling in Based the BiTE emerging on reported confidence that patients. we therapy bolstered ALL five-year other our from in is confidence high. Our platform data

for is markets. demand The innovative U.S. growing rapidly larger the outside the medicines European and

to trends, Looking an our at time. part demographic of important made this why That's some international we expect continue expansion for strategy. we've

XX% Japan Internationally our markets to light. and at beginning the you from strategy returns the historically And absent also measurable we can benefits you We're up like our China, in quarter. of see second volumes see efforts. to look where our were if were coming

Japan pleased with was our market we're And very well BLINCYTO approve Similarly, first We're by EVENITY in country to and the first the globally Japan. launch. overall, of performing our partnership. the Amgen-Astellas there. encouraged is performance biopharma uptake was

by still for days long-term and that encouraged for medicines advancing it another XGEVA. China, the launches is growth the early though market in us progress of early and Amgen, we're represents with for Repatha our opportunity attractive

whenever you you Amgen, short get clear in we're deliver long-term, succeed about only At to the the in medium-term. and we in always the that delivering talk long-term, if

stewardship our our maintained QX of our Our in following returns And reflected on and a our and is strong recently share products. capital ongoing operating our number market that With and the doing of return cash mature of portfolio to competitive results expirations products, launched in also show pressure we're our margins, performance business shareholders patent that. of across buybacks. steady we attractive in dividends across

We'll long-term record track will staying we to long-term on us invest focused be our reestablish growth. execution the that and and as productivity, enable closely seek to opportunities in

therapies of all opportunities many across phases first-in-class our novel long-term pipeline. Our include

has very AMG clinic. generated course our KRAS GXXC and to One significant the which is inhibitor, of XXX these through of move interest continues rapidly

the against other as We months respiratory therapies cardiovascular anticipate readouts advance data portfolio over inflammatory disease, next disease across the many we important cancer, XX and disorders.

important genetics our through industry-leading research Nuevolution. when acquisition about a talks information capability well as bolstered more he with added and our I'd development with in moment. our a to collaborations platform human QX of note will collaboration Healthcare about share Dave as Intermountain in Additionally, pipeline like these research new Reese and our we we

let couple fluid. with the but them the administration me debate to will share speculate on of a the various that too remains know thoughts first drug be the the pricing and of environment proposals, States in still Congress as process United what changes it's given any here you is and early Now whether if are playing The impact be out. considering on any noting are there you might that there

attention focus, but many bill important in example advancing. this Finance Senate and the has and the know of an I be Committee in is remain likely controversial provisions before bill modified attracted particular will

that any a bear from and Amgen's a particularly serious of costs in ensuring help our in that and focused that dialogue that's find pricing change market-based the committed advancing of anyway benefit world's drug and engage we'll to most on diseases. with and are more we're promotes drug of more to help legislation issues administration will some by think out-of-pocket initiatives present generated Congress patients societal done address burden patients on be ways that in disproportionate we who continue directly innovation financial respects savings can and through to thoughtful drive that the still And general share expenses. to

we through our introduction the to AMGEVITA, our societal burden in of of and year, first is the Europe, to to Herceptin, our One alleviate some launched Last and solution biosimilar biosimilar biosimilars. financial biosimilars KANJINTI, Humira.

play and biosimilars emerging in of couple will to the to to U.S. access U.S. biosimilar of world, weeks ago Avastin we're and in launched the this We space. affordability be KANJINTI A role important and we an issues the believe in and leader in around helping MVASI, our increasingly excited a address

to we in by strong flow, R&D to in business strong generate continue but and a to We're we'll continue disciplined and highlighting aggressively prudently externally, invest that return grow our cash shareholders. organically excess remain development end business opportunities. in I'll to position capital to

excited As is and Amgen remain outlook. well our I long-term stated about earlier, we executing

review the now who to Meline, call I'll financial over performance. turn David? David will our

David Meline

growth quarter, performance the investments in quarter. the second in Bob. volume-driven Thanks newer of as EPS are with products support Overall, our year-over-year pleased in our delivered growth and Okay. we second strong

page billion X% due for growth year-over-year. the in our patent product second by declined mature sales in the financial was as X on increasing $X.X our X% in competition impacted deck. $X.X quarter the newer Worldwide to outpaced slide Turning the revenues slightly brands Worldwide billion at second year-over-year, of declined by expirations. at results products to quarter declines

year million $XX Other due revenues prior payment. million year-over-year, declined a milestone $XXX to at

We expect full continue about $X.X billion. revenues other year of to

for declined was $X income was year. second margin operating operating Non-GAAP billion the X% Non-GAAP from XX% quarter. prior and

timing lower of in As margin is in the of expected prior half the operating our year, second driven the to by be years, expenses.

continued plans, our investments our operating quarter as capability. expenses to non-GAAP permanent incremental X% from shareholder with benefiting maximize to growth year-over-year drive and Consistent make productivity value decreased second while we

communicated year, As to expect be we operating full to expense XXXX. an basis earlier on absolute versus XXXX this flat year continue

depending sales performance. an as slightly year basis and cost year-over-year at full be volume of to relatively our percent product On anticipate up continuing was a non-GAAP on We of to cost XXXX on leading sales flat sales to XX.X%. flat a absolute industry reflect of basis

programs. X% in to and of our early were support research investments expenses due development of quarter year-over-year oncology increased late-stage million Second $XXX higher and

XX.X%. of development and percent product Research was expense, as sales, a

on we an percentage For basis full continue the expect absolute our to terms trajectory increase advances. R&D as single-digit spend pipeline year in to

and year-over-year SG&A reduced driven by basis, general management expenses and administrative on decreased discretionary X% primarily discipline. cost a expenses

for absolute that expense SG&A year-over-year. expect will the an on We decline full year basis

a by net continued for liquidation favorable well million as by Other year in $XXX Amgen losses investment portfolio basis, QX. This income expense year-over-year driven million primarily were expenses performance on good and our $XX as a portfolio. prior ventures is

increase corporate XX.X% tax second second prior for primarily per XXXX, a a year-over-year rate under was net share Non-GAAP reform. to to and share. point income tax per earnings X.X $X.XX X% associated for inter-company sales quarter year increased tax quarter the non-GAAP due with the versus decreased quarter, X% non-GAAP U.S. the of The benefit

flow an $X.X second Free on payment. last impacted as billion. This to tax for year was advanced next year's XXXX by result Turning page deposit cash flow the second of balance and quarter was quarter lower X. sheet the was than cash negatively this

XX.X price QX, billion our million repurchase significant to Consistent cash deployed returns $XXX we shares In an with $X.X to shares. at of per we to average continue principles, shareholders. provide

repurchase incremental QX. to shares plan billion of X an X billion our in to We

over second share, XX% an Additionally, $X.XX increased per increase dividend quarter our of last year. to

last Cash and $XX.X due decrease of billion repayments. $X.X the to from billion, quarter primarily and second year, share debt repurchases a investments totaled approximately of

a as we ago as balance year pay from it of billion at our Our a as reduction debt continue June stands of debt XX, $XX.X $X.X to billion matures. approximately down

X. page delivering our programs, on to the business outlook XXXX long-term volume Turning pipeline, remain our and with including the for on global to continue presence solid track our performance. while plans out growth advance We to for business our drive oncology build

our XXXX the Today, we and guidance, which are second year. solid reflects for revising the half of outlook QX our the performance

previous is versus Neulasta $XX.X reflect with billion and of This Our other billion billion revised dynamics range competitive guidance $XX.X revenue of the $XX.X products. associated $XX.X to guidance to continues to evolving billion. legacy

non-GAAP our XX% per our are guidance are non-GAAP Further, revising to of guidance, of maintaining $XX.XX versus previous share earnings regard a to the XX%. to we rate to $XX.XX share outlook $XX.XX. guidance tax $XX.XX to With we

We approximately year. this of continue expenditures capital $XXX expect million to

financial turn update. I the over the to now concludes This call Murdo.

Murdo Gordon

everyone. afternoon, and good David, Thanks,

In product effectively continued portfolio, sales volumes find second mature we our newer with information brands. competing across quarter more Slide while XX. our You'll grow on of starting to the XXXX,

we let leading share to Moving of Repatha to quarter sales in start continue Slide grew this QX XX. second market. me X% with by the hold class PCSKX as year-over-year on results, competitive

patients priority year-over-year Worldwide to second over we with to we last XXXX Repatha make was period steady same States. affordability to half first expect continue as unit year, in half prescribed throughout quarter-over-quarter the year. improve growth to close The was the the the increase new patients. unit of in XX% were it access PCSKX growth the for XX% a and growth In the which United continue U.S. versus which of shown XX% class our has XX,XXX

that and the And co-pay affordability now XX% list to For patient available Medicare X% of restricted materially is affordability low coverage while co-pay to to of continue is at payers to a to access patients, XX% our fixed that seniors, disappointed improves list price price lower low we tier. have reduction version approximately Repatha fixed Medicare patients. be key

improving we very as XXXX, go So, bidding cycle through the for focused we're this number. on

had to we've risk expand a individuals that circulation which the was treatment event demonstrated recently will a at plan. front, cardiovascular XX% million commercial increased close to access insurance period their of rejected help published Recently XX access PCSKX high-risk study obtained patients. during the ESI on when Further a coverage study their XX.X-month in to by

The government agencies from all findings reinforce patient for continued health to to access plans need care stakeholders that and can and to affordability need so payers patients Repatha. the who professionals engagement get from to Repatha improve

net QX due versus the lower to U.S. October. XXXX of price took last pricing, and for last July previous in declined blended introduction to the year in regard contracts With SKU the the that effect the list price Repatha

Sequentially, current list is flat. adoption driving We're SKU roughly the net was list discontinue SKU price original price of and of the our to selling price lower committed in XXXX. the beginning plan to

a fixed up for efforts a net impact positive sales we to our long-term. on co-pay, Medicare volume see at low growth the will we patients and these and With open over reported actions that expect access

on Next year-over-year, performance XX. volume continued Prolia sales Prolia increasing on with growth. by driven to Slide XX% strong its XX%

seasonality, delivered the quarters Given quarters one versus two and and higher sales three. four

to and seen have We double-digit Prolia year-over-year in the our undertreated in penetration increase growth patient this to in investments U.S. population drive new continued

diagnosis early therapy, innovative with increasing for epidemic global leading position in convenient months focused we in with has postmenopausal and venture in health. U.S. bone-building sold this been addressing commenced Through patients. XX our we're dosing in Amgen's has March on joint partnership physician-administered $XX Along bone in April positive. once-monthly with treatment osteoporosis and EVENITY, in strengthens and feedback and EVENITY QX. Japan for and The UCB our launch million Astellas, launched

increase on to CGRP Slide free-to-paid Aimovig QX significant improvement a exiting increased the was driver on That QX sales XX% paid the growth. at We market quarter-over-quarter continue to Now of percentage XX. our sales of hold the conversion Versus see paid. leading XX%. and patients of in share in volume of

considering U.S. Penetration patients CGRP migraine million in treatment. X the the overall market is for currently eligible in low are

However, optimistic prescribed been X,XXX we and filled. have CGRP a Aimovig X to-date, with patients as therapy patients remain start week prescriptions XXX,XXX million a

Additionally the care physicians XX,XXX close since with them. number XX,XXX as have prescribed among is prescribers consistently to Aimovig prescribers launch of primary now increasing

forward We paying patients expect net have percentage going as to price increasing covered contracts from versus most full patients remain list of discounted relatively an and are stable price. free-to-paid converted under

presentation. this monthly in XX-milligram the a further convenient quarter single there's XXX-milligram retail innovative prepare one-time contribute a in a we autoinjector strength in grow We're will a continue into of confident launched We to the the replacing of and portfolio. increase the small believe by Aimovig expansion that for two product Coupled Amgen's Aimovig demand. with to amount channel the to

in the and XX% Vectibix, oncology totaled Kyprolis, Nplate, BLINCYTO, to hematology Moving business our IMLYGIC billion growing $X.X of year-over-year. portfolio collectively and quarter the XGEVA,

For on year-over-year, larger grew In more XGEVA XX%. U.S. the detail share let's XX% is start QX, XGEVA on brands, primarily with volume. In the slide from approximately XX.

myeloma primarily while treated XX% number Kyprolis patients. of by multiple driven grew tumor the solid growth X%, growth rapid also U.S. patients, in seeing in year-on-year we're the volume And growing

in the when across second recognized year, our international underlying periods, worldwide grew trial normalizing that $XX clinical purchases. business last million business clinical Recall, purchases of X%. trial in And for quarter the

selling price Moving from a to full year-over-year on selling price we to anticipate expect slight by benefits. And year driven net X%, Enbrel, sales trends basis. continue. primarily volume benefit net Overall, a increased

overall, the expected a to QX, decline sales the XX% global on year-over-year, dynamic declined Neulasta competitive XX% out In as XX, playing U.S. Next a basis. on slide we in Neulasta is with

of and in patients in their absolute Exit as segment just U.S. the continued appreciate units quarter-over-quarter Onpro. long-acting the on benefits of providers the basis, Onpro, stable Neulasta with many to a was XX% share of under

and reflects our primarily prefilled our in performance confidence come biosimilar have, Neulasta in that competitive This the decline units U.S. The customers the reliability quality from to reflecting a of syringe, supply. market. our continues

XX, starting XX% QX international to XX%, net on declined price. nephrology declined due due slide selling to our Regarding business, to Switching increasing competition. lower Epogen sales Neulasta

$XX $XX also one-time, large favorable quarter to end-customer of from benefited estimates. approximately million accounting purchases. This changes million in And

net will to for with commitments Given our price continue pricing XXXX. decline EPOGEN in contractual DaVita,

to Aranesp declined X% in lower due by competition. volume increased QX, driven year-over-year

to rate in U.S. competition Aranesp both We continue XXXX, expect with decline versus in the long-acting to sales short-acting a XXXX faster and at

more doubling dialysis to are experience majority midsize and emetic continues Independent on basis. their Parsabiv patients, and providers year-over-year solid Parsabiv than sales FMC growth, while for a their adoption. calcium increasing a DaVita utilize of

see of you a QX XX, result year-over-year. Turning launches to that can small-molecule slide generic sales $XXX as by Sensipar, at-risk declined approximately on million some

Sensipar in believe remains We generic inventory the market. that of

Sensipar about magnitude proceedings, Given U.S. future uncertainty of ongoing the legal remains sales. there

like of products. I'd to biosimilar strong performance the highlight our

Kanjinti, outside with progressing in Herceptin, and Amgevita the to launches $XXX than million. expectations, line U.S. our annualizing Humira biosimilar Our to greater our our of biosimilar at are

first-ever launched our biosimilars Kanjinti in and recently our Avastin. with Mvasi also the We U.S. to biosimilar

We are both payers. and encouraged important biosimilar of and that this expertise world-class biologic in market us shaping our the and dynamics advancing for in our greatly will innovator experience benefit and manufacturing in molecules patients

I'm In value our our products growth deliver to and nicely. with mature summary, launch to deliver the pleased evolution see, careful products, are planning and grow future, brands. portfolio biosimilar of that is for new defend in progressing as our positioned the we product I volume believe to well we continue

And and across biosimilar We're continue prepared high-quality, to products for the with that globe. challenges providing markets drive in patients the us. face toward innovative

me Now to Dave over turn let it Reese.

David Reese

afternoon, leadership a It's of the everyone. year been Thanks, assumed R&D I and organization. good since Murdo,

progress. on facing of rates to the cycle challenges drug decreasing group, time. success improving wanted take I And are core a and reflect to any Two R&D moment development our the

tightly human in namely, biology, world-class has that organization foundation, two integrated research X one, a engineering. created and as a we've strength challenges, molecular genetics triple-threat these core address To capabilities,

recent human like some progress that highlight gave have And I tangible the build fronts. on industry-leading platform. would on that of expanded capability. acquisition We genetics have And deCODE Genetics, we to this. The announcements all us made

million increase are leading the our sample we announced the delivery in about in will with Intermountain over size collaboration which the Last the here five to network X.X there participants a years. integrated month, million, by next Health, Today deCODE database. up X.X U.S.

access collaboration use the enhance genetic Intermountain discovery improve leaders development appropriate, to give population And health. genetics information important our target as participants and unique of to This to will efforts. allow

in genetics lead human have solidify The in of years use put platform to we our will place the come. for

Another to now welcome of was forward colleagues our DNA-encoded look new technologies like our engine Copenhagen their Nuevolution platform. completed. library in integrating the innovation other expertise and our research We'd to acquisition investment in in and world-class into

our forward. These enhance that and small going molecule molecules engineer on will induce to capabilities major a degradation, we targeted emphasis protein which our ability place technologies

heart speaks our to Turning a rapid accumulate. we placed an as to is have conducted and mecarbil platform of event-driven the Phase disease, In failure outcome largest have Omecamtiv X,XXX enrollment therapeutic study over completed patients, building clinical This in our study cardiovascular timing studies study. clinical we that GALACTIC-HF X areas. At updates and ever events on the and will is emphasis expected on we trials deliver efficient provide can one execution.

human launching data of our next program, we RNA interfering half anticipate AMG elevated LP(a) of the on based healthy first and volunteers the next enrolling known now patients the With on with year. LP(a) in phase small development the XXX are

Phase year. with next our data on asthma schedule study in tezepelumab expected continues In enrollment inflammation, X

targets program ligand We X as into systematic BAFF ICOS are erythematosus. say more XXX, antibody the conjugate and I on AMG progresses. advancing for have to also Phase treatment peptide of that the XXX lupus AMG bispecific will a

sustained at Aimovig American migraine In we American CGRP four-year and in only migraine XX% that reductions the data the least treatment Neurology at additional reduction. a monthly with detected at days. response achieving extended Aimovig meetings recently is response Academy were our Headache presented Aimovig over Society more in period. inhibitor of achieving monthly long-term safety day of No migraine signals a portfolio, with data demonstrate clinical XXX% achieving a response migraine XX% and XX% half patients than new least one-third the in

received EVENITY the Canada, U.S. approval approved in EVENITY now the negative and disappointed a We the endeavor. the requesting discussed will we treatment believe Japan we is at Australia other EVENITY UCB option postmenopausal and health, as written Medicines fracture. submitted bone including important has and CHMP in Agency In risk CHMP. notice patients osteoporosis an Korea. this Europe countries by and by South Murdo support of also the who opinion high reexamination in We to opinion in in is were UCB with European for are recently strongly that of

data our to research colorectal KRAS was a first-in-human oncology. in simply Turning in begin a of very decades nearly response GXXC We in the our After XXX, lung to overwhelming. adverse event the community with inhibitor. the a I'll inhibitor, rate AMG KRAS with response pursuit from data four reported stable profile. XX% cancer medical cell ASCO tolerable at cancer and non-small encouraging disease of

Today report is to and in rapidly. responses cancer am patients program that formal appendiceal pleased and the tumor I colorectal moving we now have forward

enrolling non-small We enrollment monotherapy also and our have cohort in cancer in combination patients PD-X the now lung completed arm. cell are expansion

also cancer in days our lung Conference program and the early portion Cancer will of registration coming begin provide the We Lung the September. cancer World potential X in Phase XXXX in lung the of we'll an in at progress enabling on update of patients monotherapy enrollment

the initially I program. just year up development on would enthusiastic remain clinic in We aggressively prosecute one and coming the the continue of of August we promise extraordinarily XXXX. about highlight to entering that are since XXX AMG

dose castrate our encouraging with AMG AMG we We at to escalation molecule for solid prostate XXX. extended tumor prostate-specific molecule XXX, The initial were a very the cancer. half first molecule life BiTE Turning our from are currently antigen resistant with membrane platform. an BiTE BiTE presented and in data data ASCO BiTE

we canonical BCMA through program BiTE molecule data on myeloma depending and medical half-life spring to beyond data update at a to a expect in extended multiple availability. BCMA BiTE nicely some our At we the an initial molecule next with showing advance provided also meeting durability first-in-human XXX, dose AMG AMG ASCO year present on continues patients. escalation out our our XXX

note paused I in Before FLTX we oncology, leave DLLX CAR and I would Kite have our collaboration. the that programs T

to have keen cellular interest continue a in We therapies.

in direct likely our the will focus technologies and our developing new-generation collaborations. on strategic molecules confidence the efforts light our through platform, However, maintain cellular BiTE towards in BiTE of growing we immediate and therapy

approval biosimilars. by our of We Herceptin. received QX. in FDA indications ABP completed for and for we the data to has The approved KANJINTI study have Briefly expect all in-house end of lymphoma biosimilar Rituxan XXX, the of dosing non-Hodgkin's

And finally, the FDA review of ABP date XXX, our action biosimilar target REMICADE continues to in progress toward the BsUFA Bob? December.

Bob Bradway

Okay. remind now later questions. started. through And if turn hour out to Thanks, that fact we'll we could questions procedure callers of an move try the get this, usual, respect you the we for David. let's Ian please started of for so our can to than briskly

Operator

from question Gal line first is Our the Bernstein. Ronny Ronny. Instructions] of [Operator from

Ronny Gal

afternoon, very Good I'd quarter. side. on Biosimilars, on a morning. like congratulations Good one nice and to defending ask attacking

the United States. on the biosimilars the of two congratulations in First, launch

yet. of And you for impact able mg mg Where line you XXX to at Would you in biosimilars the adoption think the trends have kind non-XXXB lower the right not will to then the share hospitals? Can do XXX now? on only have get it the do you you with hospitals a XXXB and give like and defending us side of the initial is the clinic the be Neulasta. looking and uptake? on when think KANJINTI For going us dose time an you're

Bob Bradway

the it on the to have the parts. question you take We'll in the Murdo, answer do XXX? Okay. for first Ronny. two Thanks question.

Murdo Gordon

Yes.

ability Ronny So KANJINTI We're I seeing and had initially have Neulasta, then the and hospitals we as we the our in to response to And lot providers. of don't effects timing good competition in and of we're resistance with you good the have a but MVASI the the anticipated. feel payers, we're continue biosimilar to whole market now. market with on exact we presentations seeing right conversations the compete to not about we see for having

that seeing of contracted. a an business uptick stronger performance XXXB are channel. in seeing We're the in of not also we have biosimilars We biosimilars

Onpro support that unit So of again we're something market majority is basis that to to And see good performance overall, hoped feeling it's ability overall holding had that expected. for that also seeing high-quality a being to think And now I in that to we would as on that Amgen of our appreciated that's franchise. by the a accounts. reliability the in and is have strong quarter-over-quarter recognized business But on continues and long-acting we're happen. supply we filgrastim continuing

Operator

And our next question Chris Chris? Jaffray. line is from from Piper of Raymond the

Chris Raymond

Hey, question. taking the thanks for

Just on AMG XXX.

on So on kind the of your tumor in responses CRC. keen commentary

So if got enrolled for patients new had these some maybe -- these to up-dosing. here. clarity give Are you the know wonder were you have I could and intrapatient option that have dose, maybe I XXX-milligram patients or were an

kind lung, I of terms know on who in said starting could there year. setting and be the color maybe would color Thanks. any also great. that a question the So registration just constitutes give trial the a great. control would responded on design you of if some this be but third-line in in And then maybe in second part lung wondering you it's what of

Bob Bradway

of that we're patients forward to going majority the milligrams. have will XXX been treated regard With Sure. at colorectal, reporting Yes.

patient recall one you that dose had at As may was at I point only that ASCO, on think level. we who

And accumulate target year dose when of and year so of we'll we provide at the clinical to activity. updates we that particular end a next the sense data in of real towards enough have first part the as get the patients indication the

be cancer we the plans, indication registration forward. going that will lead lung would potential assume of terms In

mentioned would productive pathway as We're forward. of discussions rapidly we good very with we'll the in particular regulatory will pathways moving forward. we coming As a had be I we've go and provide very, say, in and have Phase updates the enrolling that on program. moving days, II of authorities sense portion But the that I

Operator

is Matthew. line Stanley. Harrison from question of next Morgan from the our And Matthew

Matthew Harrison

that for see for Thank the we another guess me. what your BiTEs extended that to reported that the half-life the the may question in those taking you've in move ahead? to far needs just question. data on and pipeline and Great. what programs terms you I fall efficacy look view Thanks. Can of on BiTEs, the clarify data canonical like versus safety so

Bob Bradway

Yes.

as the to past a the we in extended efficacy prefer are said general, and Matt equal profiles meaning think that I safety expect what short will would program with seeing in we've half-life things the being one comparable go all half-life emerging hematologic, I data BiTE. increasing to solid in program a tumors getting as think on forward. we'll look sharing across those extended we we're or data first-generation and Based forward both malignancies and confidence half-life

Operator

Evan from from of the Credit next line And is Suisse. our Seigerman question Evan?

Evan Seigerman

for Thanks the taking questions. all. Hi,

health on recent competition? more there. with United care biosimilar use you broad of on really molecules? And guess U.S. your rebates how the need in the your So do protect do biologics you see changes what's And the view in launches of branded light to in States, structural of of biosimilars? to So what a I the innovator compete biosimilar to use system encourage few there's in

Bob Bradway

Yeah. There's ahead go there. I'll Murdo. or a Evan sorry Go in few questions Go -- parts. in ahead these ahead. take

Murdo Gordon

with being parts, competition and we you. anticipate the I of Evan, gist the launches with compete are the market and viability seeing of our we experiencing mean a effectively biosimilar surround Neulasta in seemed on the think your healthy in able Thank evolve. MVASI question biosimilar to I biosimilar very new competitive We're two Yeah. you. U.S. and thank to both market KANJINTI.

of we reliable high-quality four Amgen fact supply in where the the market. decades in have competitively think differentiates is I that

and educational oncology our customers, also to and reimbursement our and are patient And to using offer able support. in strong cover who many services We treatment history these we're decisions of will given experience the biosimilars sector. making be able physician

fluid that and in outside in I you market market very of and the think experience that attractive since and remind I see a to the deeper originator products think while pricing once barrier U.S. less competition deeper biosimilars the against U.S. I dynamics for become biosimilars many of than in are they mature, were. we'll that we manufacturers. And of future. I And penetration continue on a will in years slow and very think just Europe the Europe in have the biosimilars also has of now started

Bob Bradway

a And Evan I'll there there. add just policy perspective from

diminishing molecules, favor are Some is the not them. that a in innovator what think we fear vibrant might country in have anything over the competitive field. effect our changes the biosimilars the of long-term would industry advocating the and that biosimilars, competitive long-term tilts U.S. biosimilars We among needs the be would perversely marketplace that the are opportunity Two for for who playing

generic example And to are small-molecule in the that fact relating we companies there for manufacture individual abuses to happened the avoid the in unfortunate with U.S., there want are left license industry the has where products. single market what to generic

to for for we'll effort. that having molecules. without country long run return able a is that playing those run do produced think for think safely we field competitors what And reliably vibrant competitive the their biosimilars in we can biosimilar fair a tilt that So have market by policies to that needs the and be favor the of

Murdo Gordon

is on XXX October if KANJINTI I in FDA jump milligrams And XXXX. XX, action question. SKU date can just Thanks. Ronny earlier close The to Gal's

Operator

the line of And our from Yaron? is Cowen. from Yaron next Werber question

Yaron Werber

Great. understand the I on one the formulation acidity a the two little that also with And Maybe share the the what solubility gastric is We have you. bit parts. bit compound? -- XXX a Thank and first follow-up little lower of a in us or better can David on than solubility intestinal. there you

PD-X that your side, the you are you. on is then And combo that combo on see you you Thank what as activity CLC especially the a on seeing formulation? the journey going there you're next? as next stage combo be TKI a contemplate single-agent or thinking So to now

David Reese

Sure.

me Yaron. let take in turn both those So questions of

very broadly solubility, to of the to attractive with inhibitor, is interval. profile. through what say that of based profile the remind terms a level everyone the pharmacokinetic dosing covalent we've with on I target the key patients confidence the of And period adequate now a In in dozen for again poison that happy the drug. pharmacodynamic we've we've to really a maintain clinic very time date us a several And is got pharmacokinetic been across to above and a would seen exposures gives target

obviously, guidance targeted of moves into interest early we'll both program next additional of a And year be cancer, the would provide later forward, therapies. and In and forward, as terms agents say with colorectal immunotherapeutic will that I year. combinations little potentially great in going additional

Operator

from question And our Geoffrey Leerink Geoffrey? next of is Partners. from line the Porges

Geoffrey Porges

from my erosion if appreciate have you what by can't would I'm for court you some all I be taking to trajectory, overturned? is Enbrel, we could still give outlook that of guess, that I we a or is now. anticipating of about sure the much. for subparts. we we your on the try result And how hypothetically last of, along kind myself issued might very really confine us been comment, thoughts fallbacks you there question. Sandoz but district I'll rapid think patent And could talk question the that and three the about be get main expected you Thank Should is Bob your that? risk unexpectedly asked your And a litigation. sort in was perhaps of I

Bob Bradway

understand so anxious I courts and are you're that of Geoff, course, from we. Sure. answer for the an

you as know are intellectual surrounding the confident We property Enbrel. in

So appeal than more we can we that that -- the do that know intend expect we go decision intellectual whatever because we feel for surprise we and us will molecule be that for again property if any you were as when us and that for imagine property that robust would we respected. against intellectual have we reason should you But expect when about decision. to don't

Geoff to the that defer think as competition we'll I about for Enbrel, this time. question So at hypothetical Thanks. discussing

Operator

from is line Umer question next of from our Evercore Umer? the And Raffat ISI.

Umer Raffat

It's all a question Hi. just Thanks parts. with I my clarification. three had so much one questions. taking

you than a, have you've you what level? to KRAS one. much. appendiceal? more for one can only to you one clarify; I that it's formal if wanted just Reese's update are and very colorectal you on and these finally in And mentioned tumor one Number confirm So ask dose or responses? at also Number thank two, colorectal Thank responses. response can

Bob Bradway

Yes.

are so appendiceal in we Yes in niche have what responses, and patient tumor is It three So have These many those colorectal resist saying parts patients these is of formal which cancer. yet to cancer turn. responses. the taking I dosed a by alluded opened long at the data amount the of we few expect done ago and dose. the have enrolling a not months had target in large flood additional patients to that. of expansion on just scans Recall coming cohort have a repeat that to

I've are I'm are tolerability. profile emerging the very in with impressed that continuing We say development for can good very drug safety I see XXX. been I long AMG time with to a seeing we only now, and involved Phase

David Meline

Dose levels?

Bob Bradway

levels. Dose

all XXX forward the Going it's at milligrams.

Operator

And our from is Mohit the Bansal from next line question of Citigroup. Mohit?

Mohit Bansal

your versus later you. one for taking see or And my question, when Thanks Thank you mechanistically? Arvind approach you results contrast this favorable some the and candidate. thanks we for Could A on Great. year out. expect siRNA approach compare should and the Lp(a) your shout next oligonucleotide the early year? please quick data

Bob Bradway

Yes. I'll address be to that happy question.

question the around the would seen, in data is volunteer encouraging I Lp(a). say So portion first-in-human the We've very study. healthy of

that next are part on that elevated program of development the we've of clinical to-date the phase dosing seen year. the and expect based next levels with patients Lp(a) now early -- into We move to in promising data

these In specifically antisense the comment of I other's will of a component long-term development and siRNA on can't molecules programs. oligonucleotides. any critical be safety the approach, Like

the be actually I modalities that that required to necessary Lp(a) lower nature probably will the In siRNA because addition, of the of would to be tackle of point something like will types out levels. molecule and

Operator

line is And Goldman Flynn Sachs. from from our next Terence the of question Terence?

Terence Flynn

the big for lot of Thanks M&A in one. seen a a We've the taking space Bob obviously question. recently. picture Maybe Hi.

Just guess, role Amgen does industry thinking that? the a a as you what's about again as how Thanks. in big your on how play Enbrel part? you picture And maybe or can strategy I capital where you allocation think into litigation, fit think at going about the are

Bob Bradway

as in said through also at strong We we organically sheet. to think, flow, a I think I ways company grow we're strong well. my business think can is and a remarks, business the development. balance performing we have Terence we cash looking grow And the

again continue will regions to of interest desire to large disciplined expect where expand. we're So But at business stated we have in world-class be we to a we and -- and opportunities look therapeutic looking the development have opportunities I'd our we small. areas continue stated our at and geographic that effort

Operator

And from from Markets. next question MacKay Capital Kennen of is RBC Kennen? line the our

Kennen MacKay

we or market the the mid-XX% for Neulasta. are come? I guidance basically majority taking on Thank this have basically Murdo this of of, sort of was that the erosion one erosion from there impact is down, prefilled Thanks of is I gone biosimilars guess, for given coming XX% just the Hi. the Should think commands, on seen since thinking Maybe question. is sort more competition, still or of, syringe. your now biosimilar and to Onpro we that still sales you. the about

Murdo Gordon

obviously Yes. since competitors trends seen we're more clearly competitor advent in second erosion of seeing And The more Kennen. the we've that -- volume now price are Thanks, competition of two a -- seen erosion. and two function market. having the the

year. syringe and prefilled are stable and persistency physicians the some Onpro convenience And seeing pressure see continue price good the see both and the feel We and are that could will I quarter-on-quarter on additional the on may this an differentiation would trends we competitor assuming still current that we is we Onpro about provides say that with patients unit it What and offers. evolution makes that us that Onpro.

we that looking think place forward to going continue think to this biosimilar is a space. – competitive I be

Operator

Jay the And next line our is Jay? from from Oppenheimer. question of Olson

Jay Olson

in hey, Congrats confirming how if you Praluent Germany And on patents. if favor Thank PCSKX your infringes no Well, ruling that question. could taking Praluent be any you recent the Amgen court guys. there available. in may for you quarter. wondering, I on on a German markets, dynamics where There or evolve longer thoughts the are was any please was may market of other had share

Bob Bradway

Thanks the Jay. Yeah. for question,

our IP field with German intellectual to the market. the will infringed Office Repatha and that made courts and we've for from upheld The property found Patent instructed obviously product. the the First, that that upheld European that be innovative they them – removed to contribution

Sanofi under filed an review. appeal is and that matter

you're and it another IP to now will receive whichever to But Germany a has I course we're we therapy market to sure needs able the our that be are need satisfy that in think is Our making market. of upheld. patients right of able think on where focus been position that, be

IP trials had And Patent in course, our upheld Japan, our region. favor. on European As both that trials U.S. of the matter where found as two our court found follows I Office of know, in has jury we've broadly also more in had said, the which the you favor. in in That which

Asia the Europe, IP the continues So States. in United move forward and to process

Operator

Jefferies. And line our next question is of Michael? from from Yee the Michael

Michael Yee

for monotherapy? going in cetera. Maybe you obviously, around enrollment the when combination – would can and question. David about on data And on responses around et lung, to confidence KRAS great. see an Hey, exciting as expect back talk the Thanks we durability there with you opportunity? get comment then that's just assume about colorectal longer-term Thanks. in talked could Reese you the I to I to comments PD-X what would first

David Reese

durability. I will favorably September. been as presenting say update thanks to-date terms Mike. at the clinical Yeah, a be that durability with impressed Yeah, Lung in we've would of we in But I Conference World mentioned, potential

seeing many all that not gain for it's emergence these recently to insight patients rapid resistance. so durability as to-date goes of we'll and early been of least, enrolled on further time into days But have are have example on. trials, recall We we the at

what would think preclinical probably synergistic very durable immune I I infiltration Class of are tumor inhibition, course In on long-lasting between have of the MHC KRAS suggesting potential remissions. up-regulation goal interactions combination with due inhibition and combinations, enhanced PD-X data our kind And strong checkpoint that we and be of very cells. to

Operator

Fitzgerald. is question next Alethia? of line our Alethia from And Cantor Young the from

Alethia Young

question. Thanks my maybe Hey, One question clarification. guys. one and taking for

Is the KRAS, it colorectal? mostly negotiations? rolling? And situation talk you you beyond little with get kind the just a Repatha moving on bit then is to kind maybe where are XXX Just in like the Thanks. the on can ball it there of dosing And are in why pieces co-pays planning occurring? about of

Murdo Gordon

Okay.

question, can it Repatha to Dave. maybe I'll I So the over and Alethia turn with start then

have year, competition that contracts PCSKX market And and As occurred, given since been negotiations access you know, realized. competitive is one. and the some that there last commercial then a improvements were payer

payers – Part the of and in I to recognized was other list the reimbursement, at in year reduction PBMs process try the D and Repatha to normal were benefit our last price low the Medicare time or we Part that, off-cycle D produce by of their would October our say we mid-cycle improve that of the designs. introduction which

so price would Repatha has quickly not transpired. move some payers at co-pay And add to list PBMs low hoped while that a we D had and Medicare that to Part fixed formularies

optimistic D quarter. the listings formulary we able Medicare XXXX the for that fixed So D in that co-pay as know benefit enter Part make will fourth we are be Repatha in to we improvement a year, we Medicare Part significant and will

David Reese

at cancer dosing in patients of now mentioned beyond as a And terms dose. I enrolled number of target fair colorectal Great. right we've XXX that milligrams, in

early I we'll as say drugs of It is program. But I dosing from there you often would point these in target course, go that And development this think and is our scheduling along. with remains for tweaking XXX look this of at that dose. insights cohort.

we some if and doses explore to see data emerging other going forward. assess want schedules will to We

take Ian, two we and wrap-up. don’t Why last questions, then we’ll

Operator

well. Very

question Do? next Capital Our BMO from Do of is Kim Markets. line the from

Do Kim

in. me squeezing for Thanks Great.

buying the collaboration acquire to on platform the the ones? for or additional company the acquisition on new stage? was what of their And clinical in could and programs and provide licensing is some for potential assets I Just existing decision Nuevolution, another versus just in-house with the context plan hoping the you bring

Bob Bradway

address be I'll sure. that. happy Yeah, to

made of partnership programs potential when bringing them had thought And So, looked acquisition that partnership, at expansion with quite them that grew the on simply we that that Nuevolution we successful. sense. breadth of out we the onboard actually a was of

remain Copenhagen, move as have In would terms Research technology. will Amgen we that world-leading we forward. we a those on are and of research going incredibly enthusiastic them we And established things is we're obviously their think point I forward. out site plan and Amgen stand-alone will fulfill they obligations, existing that as about what

Arvind Sood

one. and let's a comments, Ian, closing few After there take make call. will I'll which, the if is one close then Okay. question last Bob

Operator

Very well.

Salim is of Our from Salim? Securities. the final Syed from Mizuho question line

Salim Syed

taking Hey, on do M&A M&A. Hey, your the Bob, you science it valuation? understand just internally guys. this you ROI just the it the on Thanks had both get But, totally grow you line more follow-up believe you. what looking are is you at gating guess is And the the you that done right Is can stock? FTC, that to now a it factors for seeing have top been? highest you're say what something I you're truly and I year? to Is question. Why not or would or appreciate I the I that haven't it. buying own how Thank commentary won the back externally.

Bob Bradway

I look we opportunities. range think at Salim, a of

earn shareholders. that the It's to things earn for trying easy target shareholders, have I on It's to think hard think us been the been shareholders. our focused that valuations we're stretched. return in we a where return for prices our for some to find of return liked we keen transactions for a the earn at can and

a than clearly else more consideration anything that's think. for been I So, us

to company. disciplined shareholders invest that by can the being But expect us for help continue that that and grow we'll look again, in we opportunities find enable ones fully and win our to us programs to for

money our to the be hole burning to that not pocket. forward, So, have we're resources able and optimistic. We're pleased we is move a in

Arvind Sood

Okay.

to want Bob, comments? make with some So, that, do closing you

Bob Bradway

Sure.

number we me gains the of which to where pleased our we what important with adding think long-term prospect to through of prospects, end first our our unit products, performance branded our say year, top pipeline in about which as by biosimilars half a that large of started, and our line. Let excited and is driven the part innovative think the well about and just I we're across volume are excited be will

our who the on And staff driving just our let deliver patients world, on around shareholders. continue remaining me Amgen to finally thank us focused to our help for value serve mission while

Arvind Sood

participation. and to your you Thanks Excellent. of for all thanks Bob,

questions, feel to by like call hours. us. would standing IR team be continue free you will comments, follow-on any The for have you the If Thanks if to again. several discussion,

Operator

Ladies and does conference. We for greatly gentlemen, participation. your this conclude today's you thank

now may You disconnect.

Amgen (AMGN) 30 Jul 192019 Q2 Earnings call transcript